American Drops Etihad and Qatar Codeshares

For years the legacy carriers of the US (United, Delta, and American) have been at odds with the “Big 3” Middle Eastern carriers (Etihad, Emirates, and Qatar aka the “ME3”). The ostensible issue is that these Big 3 Middle Eastern carriers have been accused of taking government subsidies in violation of the Open Skies Agreement. The subsidies come in the form of interest free loans (with no repayment obligations), grants, capital injections, airport fee exemptions, and others.

These subsidies are an issue because they allow these carriers to fly routes which are not profitable and thus the airlines have a larger global presence. This larger presence brings more people through Qatar and the UAE (United Arab Emirates) and helps to boost and grow the local economies.

This global presence also means more competition to the US legacy carriers and that’s what many believe the issues really stem from. It’s argued that these subsidies take away American jobs by unfairly taking over the US market share by directly threatening more than 10 million jobs and $1.5 trillion in nationwide economic activity supported by U.S. airlines.

(There are more sides to the story than this but I’ll leave it at that just to give you a sense of the conflict.)

Despite all of this contention, American is still partners with Etihad and Qatar (the latter of which is also a member of the oneworld Alliance). American also codeshares with British Airways and Iberia, whose parent company, IAG, gets its largest investments from Qatar. So American has been in a very awkward situation since this all seems wildly contradictory. So they’ve decided to take action and drop Etihad and Qatar as codeshare partners.

View from the Wing (h/t) relays a message from American:

In light of our ongoing dispute over the Open Skies agreements, American Airlines notified Etihad Airways and Qatar Airways on June 29 of our decision to terminate our codeshare relationships.

Given the extremely strong public stance that American has taken on the ME3 issue, we have reached the conclusion that the codesharing relationships between American and these carriers no longer make sense for us.

This decision has no material financial impact on American and is an extension of our stance against the illegal subsidies that these carriers receive from their governments. We are committed to doing everything we can to continue to support our team members and ensure that there is fair competition between American and the Gulf carriers.

This really is more of a symbolic gesture, as OMAAT points out. American states that it has no “material financial impact” on them (whatever that actually means is up for debate). The important take-a-way here for award travel is that this does NOT affect your ability to redeem AAdvantage miles on Etihad and Qatar. You can also still earn AAdvantage miles by flying on these partners. (However, as OMAAT notes, you won’t be able to earn AA elite qualifying miles on Etihad flights.)

This means that you can still use your AAdvantage miles to book amazing cabins like the Etihad Apartment or Qatar Q Suites. I suspect that this is what most of my readers care about at this point so there’s no need to worry, for now at least.

The codeshare changes are not expected to take effect until March 25, 2018.